cost was a huge thing but commodore had the 1200 selling for way under what anything else was and the 4000 selling for way above anything else.
If they had gone more for middle ground they could have added features to the 1200 and sold more 4000s
At 399 the original A1200 wasn't 'too cheap' at all. It had a 14mhz bare minimum 32bit CPU crippled to 50% speed as purchased due to all machines sold being 2mb chip ram, no CD-ROM package bundle from Commodore, no 16bit sound or increased number of sound channels. A1200 was NOT overpriced at all. Simm slot for internal simple fast ram addition, dual Paula and a proper chunky pixel mode was not too much to ask for 399 really. HD floppy drive also would have been nice, the price difference for the DD/HD units must have been peanuts anyway. Oh and it should have been A1200 in 92 and A4000 later in 93...NOT the other way round if they wanted an AGA machine to fend off bankruptcy.
But I agree, there should have been an A1300 or something with internal CD, 28mhz 020, and 2mb+1mb Chip + Fast ram as a standard machine. This would have helped a lot as games programmers then had a target machine intended for home buyers to aspire towards.
Also such a machine should have come with a fully functional internet browser and all the necessary networky black magic to make it work (and a non crippled serial port too allowing at least 33.6kb modems to work unencumbered).